Monday 20 June 2011 16.03 EDT
First published on Monday 20 June 2011 16.03 EDT

The high street could be hit by another wave of administrations as retailers prepare to stump up the latest quarterly rent payment, an insolvency expert has warned.

A wave of shops could be on the financial rack on Friday, when quarterly rents for commercial property are traditionally paid. A number of high-profile firms – including Whittard of Chelsea, clothes shop the Officer's Club and record shop Zavvi – have gone into administration shortly after "quarter day", which falls in late March, June, September and December, as they struggle to meet their rental obligations.

And with consumers cutting back on spending in the face of the worst squeeze in living standards for 40 years, Frances Coulson, president of insolvency trade body R3, believes that more businesses could follow suit this time round. The heavy snow that hit the UK during the winter may be a distant memory now, but she warned that the big freeze might still have something nasty in store for retailers.

"Trading conditions have clearly been extremely tough for many retailers since 2008, and after hanging on through the worst of the recession, the heavy snow that we all endured through the winter could well turn out to be the straw that breaks the camel's back," he said. "A lot of firms would have drawn together the last of their resources to make it past the March payment date. The latest fall in retail sales shows that there has been little obvious improvement over the last three months, and we could be about to see another swathe of retailers reaching the end of the road when the quarterly rental payments fall due."

Retail sales dropped by 1.4% last month, official figures showed last week, as shoppers spent less on clothes and other non-essential items to pay for higher petrol prices. With low wage growth, high food bills and fears over job security, consumers are being squeezed from all sides. Retail administrations in the first quarter of this year rose by 30% to 60, compared with 46 in the same period last year, according to research by business advisory firm Deloitte. Notable victims this year include Focus DIY and off-licence chain Oddbins.

Richard Dodd of the British Retail Consortium said: "With customers reluctant to spend unless they have to and sales down on a year ago, big bills for the next three months' rent can only add to the pressures many retailers are facing. Boarded-up shops are in no one's interests. More commercial landlords should follow the example already being set by the best and offer greater flexibility on rental terms."

The BRC had been campaigning for years for landlords to switch to monthly rent payments and believes that for new leases, paying rent a month in advance has become the norm, thanks to its campaign. "We're still saying to landlords: offer this as an option for new and existing leases," said Dodd. "They would rather have the money three months in advance. We're saying it's an anachronism which has no place in the modern world of instant electronic payments."

But the British Property Federation rejected the claim. "Landlords have been very flexible during the recession and saved some significant retailers from insolvency as a result," director of policy Ian Fletcher said. "Concessions on existing leases ultimately have a cost to someone, in this case pensioners' savings in property. That is why our members feel it is better to offer help to those in need, rather than healthy businesses trying to exploit an opportunity to change their terms of trade."

R3's research found that close to a third of consumers are now doing more shopping online, with one in five admitting to buying non-essentials in supermarkets, not specialist retail chains.

Coulson said: "Landlords are usually pragmatic enough to realise that getting some of the money they're owed and having their premises occupied is better than getting none of it and having an empty store. Arrangements to delay or reduce the payments can often be reached, and the cashflow situation could also be helped by reaching new agreements with customers and suppliers."